Life Insurance Considerations for Young Families

November 21, 2018

Will you soon be adding another member to your family? Congratulations. Now is the time when you might want to think about whether you have the proper life insurance coverage for a growing family. Read the tips below to learn a bit more about insurance for new parents.

1. Both parents should have coverage

Both you and your spouse should have life insurance that will provide coverage if something should happen to either one of you. After all, if one parent is left to raise the children, it can be very costly, both now and in the future, especially with college tuition being so high. The proper coverage for both you and your significant other will ensure that if something should happen to one of you, the remaining spouse will have financial aid in raising the children.

2. Add kids to the policy

• When children come along, you will want to add them to any existing life insurance policies as beneficiaries. If you feel that your present life insurance coverage is not sufficient for a growing family, do not hesitate in acquiring more insurance. You might want to invest in whole life insurance that will provide coverage throughout your lifetime and that also builds in cash value that can be borrowed against. Another option is to invest in term life insurance, which will provide coverage for a specified period of time, such as a time frame that will come to an end when your children are older and financially responsible.

• If you have life insurance through your employer, find out what will be necessary to add children to the policy. You want to be certain that everyone in the family has some type of coverage.

3. Is your coverage adequate?

• It is costly to raise children. The U.S. Department of Agriculture has estimated that it may cost approximately $234,900 to raise a child from the time of birth until he or she reaches the age of 17. This figure has gone up from the $200,000 that was stated previously. If you add in college tuition, that could raise the cost another $50,000 or more per child. Do you have enough life insurance to handle this added financial expense? If not, now is the time to add more coverage, which may very possibly need to be increased over time depending on how many more children may come along.

• Besides having coverage for college tuition, it has been estimated that your life insurance policy should be high enough in coverage to handle approximately six to seven times your annual income.

4. Do you have disability insurance?

New parents may also want to consider investing in disability insurance. If you should be injured and not able to work for any length of time, it can create great financial hardship, making it difficult to meet monthly expenses, including the payment of life insurance premiums.

If you have enough insurance to provide the kind of coverage you will need with a growing family, it will generate great peace of mind and reassurance.

This article has been contributed by Claire Atkinson, who writes for Kanetix in Mississauga, an insurance comparison site.